A word from Beverly, the 'No 2 Pencil' costume creator:

I created and am wearing this costume. I wore a similar costume about 20 years ago and working in an office environment thought this was an appropriate costume for our office contest. To make this costume simply cut out a round piece of cardboard that is big enough to encircle your body at the widest part, with a hole in the center for your head to fit through. Use bright yellow fabric for the main part of the pencil (I used cotton) cut 2" bigger than the circumference of the cardboard circle. before sewing this piece together add about 12" of bright pink fabric to the bottom for the eraser. Sew the whole thing together. You can then tape the fabric to the circle or sew a piece of fabric to the top to fit around the cardboard. For the pencil lead I used an old witch's hat wih the brim removed.